Exhibit Number (4)(iv)
To 9/30/95 Form 10-Q
UNLESS THIS SUBORDINATED NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE BANK OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY SUBORDINATED NOTE ISSUED UPON REGISTRATION OF TRANSFER OF, OR
IN EXCHANGE FOR, OR IN LIEU OF, THIS SUBORDINATED NOTE IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
IF THIS SUBORDINATED NOTE IS ISSUED WITH "ORIGINAL ISSUE DISCOUNT" FOR
PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE
FOLLOWING SHALL BE COMPLETED: THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR
PURPOSES OF APPLYING SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE OF 1986, AS AMENDED, TO THIS SUBORDINATED NOTE. THE ISSUE DATE OF
THIS SUBORDINATED NOTE IS _____________. THE ISSUE PRICE OF THIS SUBORDINATED
NOTE IS _____% OF ITS PRINCIPAL AMOUNT. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
ON THIS SUBORDINATED NOTE IS $_________ PER $1,000 OF THE INITIAL PRINCIPAL
AMOUNT, THE YIELD TO MATURITY IS ____%, AND THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT ALLOCABLE TO THE INITIAL SHORT ACCRUAL PERIOD, IF ANY, IS $_____ PER
$1,000 OF THE INITIAL PRINCIPAL AMOUNT, DETERMINED ON THE BASIS OF THE EXACT
METHOD.
No. SUB FLR-______________ REGISTERED
CUSIP NO.: ________________________
THE NORTHERN TRUST COMPANY
GLOBAL SUBORDINATED MEDIUM-TERM BANK NOTE
(FLOATING RATE)
ORIGINAL ISSUE DATE: PRINCIPAL AMOUNT:
INITIAL INTEREST RATE: ______% MATURITY DATE:
INTEREST RATE BASIS: INDEX MATURITY:
SPREAD AND/OR SPREAD REGULAR RECORD DATES (If other than the 15th
MULTIPLIER: day prior to each Interest Payment Date):
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE:
INTEREST PAYMENT DATES: INTEREST PAYMENT PERIOD:
INTEREST RESET DATES: INTEREST RESET PERIOD:
INITIAL REDEMPTION DATE: ANNUAL REDEMPTION PERCENTAGE REDUCTION:
INITIAL REDEMPTION PERCENTAGE:
ORIGINAL ISSUE DISCOUNT NOTE: OID AMOUNT:
Yes: ______ No: _____
OTHER PROVISIONS: CALCULATION AGENT:
ALTERNATE RATE EVENT SPREAD:
The Northern Trust Company, an Illinois banking corporation (the "Bank"),
for value received, hereby promises to pay to __________________________________
________________________________________________, or registered assigns, the
principal sum of _______________________________________________________________
________________________________________ United States Dollars on the Maturity
Date specified above and to pay interest thereon from the Original Issue Date
specified above or from the most recent interest payment date (or, if the
Interest Reset Period specified above is daily or weekly, from, and including,
the day following the most recent Regular Record Date) to which interest on this
Subordinated Note (or any predecessor Subordinated Note) has been paid or duly
provided for (each, an "Interest Payment Date"), on the Interest Payment Dates
specified above and at maturity or upon earlier redemption, if applicable,
commencing on the first Interest Payment Date next succeeding the Original Issue
Date (or, if the Original Issue Date is between a Regular Record Date and the
Interest Payment Date immediately following such Regular Record Date, on the
second Interest Payment Date following the Original Issue Date), at a rate per
annum equal to the Initial Interest Rate specified above until the first
Interest Reset Date following the Original Issue Date and, on and after such
Interest Reset Date, at the rate determined in accordance with the provisions
set forth herein, until the principal hereof is paid or made available for
payment, and (to the extent that the payment of such interest shall be legally
enforceable) at the last rate in effect prior to any payment default on any
overdue principal and premium, if any, and on any overdue installment of
interest. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will be paid to the person in whose name this
Subordinated Note (or any predecessor Subordinated Note) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the 15th calendar day (whether or not a Business Day (as defined below)) before
such Interest Payment Date (unless otherwise specified on the face hereof);
provided, however, that
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interest payable at maturity or upon earlier redemption, if applicable, will be
payable to the person to whom principal shall be payable. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to
the holder on such Regular Record Date and may either be paid to the person in
whose name this Subordinated Note (or any predecessor Subordinated Note) is
registered at the close of business on a special record date for the payment of
such defaulted interest (the "Special Record Date") to be fixed by the Bank,
notice of which shall be given to the holders of Subordinated Notes not less
than 10 calendar days prior to such Special Record Date, or be paid at any time
in any other lawful manner.
Payment of principal of, and premium, if any, and interest on, this
Subordinated Note will be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. The Bank will at all times appoint and maintain a paying agent
(the "Paying Agent") authorized by the Bank to pay the principal of, and
premium, if any, and interest on, this Subordinated Note on behalf of the Bank
and having an office or agency (the "Paying Agent Office") in The City of New
York or the City of Chicago, Illinois (the "Place of Payment"), where this
Subordinated Note may be presented or surrendered for payment and where notices,
designations or requests in respect of payments with respect to this
Subordinated Note may be served. The Bank has initially appointed itself as
such Paying Agent, with the Paying Agent Office currently located at 50 South
LaSalle Street (Level BB-A), Chicago, Illinois 60675, Attention: Securities
Services.
THIS SUBORDINATED NOTE IS A DIRECT, UNCONDITIONAL AND UNSECURED GENERAL
OBLIGATION OF THE BANK, DOES NOT EVIDENCE A DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. THIS
SUBORDINATED NOTE IS SUBORDINATE TO THE CLAIMS OF DEPOSITORS AND GENERAL
CREDITORS OF THE BANK.
Payment of the principal of, and premium, if any, and interest on, this
Subordinated Note due at maturity or upon earlier redemption, if applicable,
will be made in immediately available funds upon presentation and surrender of
this Subordinated Note to the Paying Agent at the Paying Agent Office in the
Place of Payment; provided that this Subordinated Note is presented to the
Paying Agent in time for the Paying Agent to make such payment in accordance
with its normal procedures. Payments of interest on this Subordinated Note
(other than at maturity or upon earlier redemption) will be made by wire
transfer to such account as has been appropriately designated to the Paying
Agent by the person entitled to such payments.
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This Subordinated Note is one of a duly authorized issue of Subordinated
Medium-Term Bank Notes due from five to fifteen years from date of issue of the
Bank (herein called the "Subordinated Notes").
Unless otherwise indicated on the face hereof, if the rate of interest on
this Subordinated Note resets daily, weekly or monthly, the Interest Payment
Date for this Subordinated Note will be the third Wednesday of each month; if
the rate of interest on this Subordinated Note resets quarterly, the Interest
Payment Date for this Subordinated Note will be the third Wednesday of March,
June, September and December of each year; if the rate of interest on this
Subordinated Note resets semi-annually, the Interest Payment Date for this
Subordinated Note will be the third Wednesday of each of two months of each year
specified on the face hereof that are six months apart; and if the rate of
interest on this Subordinated Note resets annually, the Interest Payment Date
for this Subordinated Note will be the third Wednesday of the month specified on
the face hereof. If any Interest Payment Date, Maturity Date or date of earlier
redemption of this Subordinated Note falls on a day that is not a Business Day,
such Interest Payment Date, Maturity Date or date of earlier redemption will be
the next succeeding Business Day; provided, however, that, if the Interest Rate
Basis specified on the face hereof is LIBOR and such next succeeding Business
Day is in the next succeeding calendar month, such Interest Payment Date,
Maturity Date or date of earlier redemption will be the immediately preceding
Business Day. "Business Day" means any day that is not a Saturday or Sunday and
that is not a day on which banking institutions in The City of New York or the
City of Chicago, Illinois generally are authorized or obligated by law or
executive order to close, and with respect to Subordinated Notes with respect to
which the Interest Rate Basis specified on the face hereof is LIBOR, any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market (a "London Business Day").
The indebtedness of the Bank evidenced by this Subordinated Note,
including principal and interest, is unsecured and subordinate and junior in
right of payment to the Bank's obligations to its depositors, its obligations
under bankers' acceptances and letters of credit, and its obligations to its
other creditors (including any obligations to any Federal Reserve Bank and the
Federal Deposit Insurance Corporation), whether now outstanding or hereafter
incurred, other than any obligations which rank on a parity with, or junior to,
the Subordinated Notes. In the event of any insolvency proceeding,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or winding-
up of the Bank, whether voluntary or involuntary, all such obligations (except
obligations which rank
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on a parity with, or junior to, the Subordinated Notes) shall be entitled to be
paid in full before any payment shall be made on account of the principal of, or
interest on, the Subordinated Notes. In the event of any such proceeding, after
payment in full of all sums owing with respect to such prior obligations, the
holders of the Subordinated Notes, together with the holders of any obligations
of the Bank ranking on a parity with the Subordinated Notes, shall be entitled
to be paid, from the remaining assets of the Bank, the unpaid principal of, and
the unpaid interest on, the Subordinated Notes or such other obligations before
any payment or other distribution, whether in cash, property, or otherwise,
shall be made on account of any capital stock or any obligations of the Bank
ranking junior to the Subordinated Notes.
The Subordinated Notes shall rank on a parity with the subordinated note
in the principal amount of $50,000,000, due January 2, 2000, issued by the Bank
to Northern Trust Corporation (the "Corporation"), the subordinated note in the
principal amount of $25,000,000, due July 1, 2002, issued by the Bank to the
Corporation, the $100,000,000 aggregate principal amount of 6.5% Subordinated
Notes due 2003 issued by the Bank in 1993, and such other obligations which may
be issued by the Bank which are specifically designated as ranking on a parity
with the Subordinated Notes by express provision in the instruments creating or
evidencing such obligations.
This Subordinated Note will not be subject to any sinking fund. If so
provided on the face of this Subordinated Note and subject to the approval of
the Federal Reserve Bank of Chicago, this Subordinated Note may be redeemed by
the Bank on and after the Initial Redemption Date, if any, specified on the face
hereof. If no Initial Redemption Date is specified on the face hereof, this
Subordinated Note may not be redeemed prior to the Maturity Date. On and after
the Initial Redemption Date, if any, and subject to the approval of the Federal
Reserve Bank of Chicago, this Subordinated Note may be redeemed at any time
either in whole or in part from time to time in increments of $1,000 (provided
that any remaining principal amount hereof shall be at least $250,000) at the
option of the Bank at the applicable Redemption Price (as defined below),
together with accrued and unpaid interest hereon at the applicable rate borne by
this Subordinated Note to the date of redemption (each such date, a "Redemption
Date"), on written notice given not more than 60 nor less than 30 calendar days
prior to the Redemption Date by the Bank to the registered holder hereof.
Whenever less than all the Subordinated Notes at any time outstanding are to be
redeemed, the terms of the Subordinated Notes to be so redeemed shall be
selected by the Bank. If less than all the Subordinated Notes with identical
terms at any time outstanding are to be redeemed, the Subordinated Notes to be
so redeemed shall be selected by the
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Paying Agent by lot or in any usual manner approved by it. In the event of
redemption of this Subordinated Note in part only, a new Subordinated Note for
the unredeemed portion hereof shall be issued in the name of the holder hereof
upon the surrender hereof.
The "Redemption Price" shall initially be the Initial Redemption
Percentage specified on the face hereof of the principal amount of this
Subordinated Note to be redeemed and shall decline at each anniversary of the
Initial Redemption Date specified on the face hereof by the Annual Redemption
Percentage Reduction, if any, specified on the face hereof, of the principal
amount to be redeemed until the Redemption Price is 100% of such principal
amount.
This Subordinated Note will not be repayable at the option of the holder
hereof prior to maturity.
The rate of interest on this Subordinated Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each such period, an
"Interest Reset Period" for this Subordinated Note, and the first calendar day
of an Interest Reset Period, an "Interest Reset Date"), as specified on the face
hereof. Unless otherwise indicated on the face hereof, if this Subordinated
Note resets daily, the Interest Reset Date will be each Business Day; if this
Subordinated Note resets weekly and the Interest Rate Basis is not the Treasury
Rate, the Interest Reset Date will be the Wednesday of each week; if this
Subordinated Note resets weekly and the Interest Rate Basis is the Treasury
Rate, the Interest Reset Date will be the Tuesday of each week (except as
provided below); if this Subordinated Note resets monthly and the Interest Rate
Basis is not the 11th District Cost of Funds Rate, the Interest Reset Date will
be the third Wednesday of each month; if this Subordinated Note resets monthly
and the Interest Rate Basis is the 11th District Cost of Funds Rate, the
Interest Reset Date will be the first calendar day of each month; if this
Subordinated Note resets quarterly, the Interest Reset Date will be the third
Wednesday of March, June, September and December; if this Subordinated Note
resets semi-annually, the Interest Reset Date will be the third Wednesday of
each of two months of each year which are six months apart, as specified on the
face hereof; and if this Subordinated Note resets annually, the Interest Reset
Date will be the third Wednesday of one month of each year, as specified on the
face hereof; provided, however, that (i) the interest rate in effect from the
Original Issue Date to the first Interest Reset Date will be the Initial
Interest Rate specified on the face hereof, and (ii) the interest rate in effect
for the ten calendar days immediately prior to maturity or earlier redemption
hereof will be the interest rate in effect on the tenth calendar day preceding
such Maturity Date or date of earlier redemption, as
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the case may be. If any Interest Reset Date with respect to this Subordinated
Note would otherwise be a day that is not a Business Day, such Interest Reset
Date will be the next succeeding Business Day, except that in the case that the
Interest Rate Basis specified on the face hereof is LIBOR, if such Business Day
is in the next succeeding calendar month, such Interest Reset Date will be the
immediately preceding Business Day.
Except as otherwise specified in this paragraph, the rate of interest on
this Subordinated Note for each Interest Reset Date shall be the rate determined
in accordance with the provisions set forth under the applicable heading below
corresponding to the Interest Rate Basis specified on the face hereof:
Commercial Paper Rate. If the Interest Rate Basis of this Subordinated
Note is the Commercial Paper Rate, the interest rate hereon for any Interest
Reset Date shall equal the Commercial Paper Rate (as determined below), as
adjusted (x) by the addition or subtraction of the Spread, if any, specified on
the face hereof and/or (y) by the multiplication by the Spread Multiplier, if
any, specified on the face hereof. "Commercial Paper Rate" means, with respect
to any Commercial Paper Interest Determination Date (as defined below), the
Money Market Yield (calculated as described below) of the rate on the relevant
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity specified on the face hereof as such rate is published by the
Board of Governors of the Federal Reserve System in the weekly statistical
release entitled "Statistical Release H.15(519), Selected Interest Rates" or any
successor publication published by the Board of Governors of the Federal Reserve
System ("H.15(519)") under the heading "Commercial Paper". If such rate is not
published prior to 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate will be the Money Market Yield (calculated as described
below) of the rate on such Commercial Paper Interest Determination Date for
commercial paper having the Index Maturity specified on the face hereof as such
rate is published by the Federal Reserve Bank of New York in its daily
statistical release entitled "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication published by the Federal Reserve Bank
of New York ("Composite Quotations") under the heading "Commercial Paper". If
such rate is published in neither H.15(519) nor in Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, the Commercial Paper Rate
for such Commercial Paper Interest Determination Date will be the Money Market
Yield of the arithmetic mean of the offered rates as of 11:00 A.M., New York
City time, on such Commercial Paper Interest Determination Date, of three
leading dealers of commercial paper in The City of New York (which may include
one or more of the Agents (as defined below)) selected by the
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Calculation Agent for commercial paper having the Index Maturity specified on
the face hereof placed for an industrial issuer whose senior unsecured bond
rating is "AA", or the equivalent, from at least two nationally recognized
rating agencies; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate determined on such Commercial Paper Interest Determination
Date will be the Commercial Paper Rate determined on the immediately preceding
Commercial Paper Interest Determination Date or, in the case of the first
Commercial Paper Interest Determination Date, the Initial Interest Rate
specified on the face hereof.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
D x 360
Money Market Yield = _______________ x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
LIBOR. If the Interest Rate Basis of this Subordinated Note is LIBOR,
the interest rate hereon for any Interest Reset Date shall equal LIBOR (as
determined below), as adjusted (x) by the addition or subtraction of the Spread,
if any, specified on the face hereof and/or (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof. LIBOR shall be
determined by the Calculation Agent in accordance with the following provisions:
(a) With respect to any LIBOR Interest Determination Date (as defined
below), LIBOR will be either: (i) if "LIBOR Reuters" is specified on the
face hereof, the arithmetic mean of the offered rates for deposits in U.S.
dollars having the Index Maturity specified on the face hereof, commencing
on the second London Business Day immediately following such LIBOR Interest
Determination Date, that appear on the Reuters Screen LIBO Page (as defined
below) as of 11:00 A.M. London time on such LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page, or (ii) if "LIBOR Telerate" is specified on the face hereof, the rate
for deposits in U.S. dollars having the Index Maturity specified on the
face hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, that appears on Telerate
Page 3750 (as defined below) as of 11:00 A.M. London time, on such LIBOR
Interest
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Determination Date. The "Reuters Screen LIBO Page" means the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or
such other page as may replace the LIBO page on that service for purposes
of displaying London interbank offered rates of major banks). "Telerate
Page 3750" means the display designated as page 3750 on the Dow Jones
Telerate Service (or such other page or pages as may replace the 3750 page
on that service or such other service or services as may be nominated by
the British Bankers' Association for the purpose of displaying London
interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters
nor LIBOR Telerate is specified on the face hereof, LIBOR will be
determined as if LIBOR Reuters has been specified. Notwithstanding the
foregoing, if fewer than two offered rates appear on the Reuters Screen
LIBO Page, or no rate appears on Telerate Page 3750, as applicable, LIBOR
in respect of a related LIBOR Interest Determination Date will be
determined as if the parties had specified the rate described in paragraph
(b) below.
(b) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, as specified
in paragraph (a)(i) above, or on which no rate appears on Telerate Page
3750, as specified in paragraph (a)(ii) above, as the case may be, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits for the period of the Index Maturity specified on
the face hereof, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London time, on such
LIBOR Interest Determination Date and in a principal amount of not less
than $1,000,000 that is representative for a single transaction in such
market at such time. If at least two such quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the arithmetic
mean of such quotations. If fewer than two quotations are provided, LIBOR
determined on such LIBOR Interest Determination Date will be the arithmetic
mean of the rates quoted at approximately 11:00 A.M. New York City time on
such LIBOR Interest Determination Date by three major banks in The City of
New York selected by the Calculation Agent for loans in U.S. dollars to
leading European banks, having the Index Maturity specified on the face
hereof, commencing on the second London Business Day following such LIBOR
Interest Determination Date, and in a principal amount of not less than
$1,000,000 that is representative for a single transaction in such market
at such time; provided, however,
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that if the banks so selected by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR determined on such LIBOR Interest
Determination Date will be LIBOR determined on the immediately preceding
LIBOR Interest Determination Date or, in the case of the first LIBOR
Interest Determination Date, the Initial Interest Rate specified on the
face hereof.
Treasury Rate. If the Interest Rate Basis of this Subordinated Note is the
Treasury Rate, the interest rate hereon for any Interest Reset Date shall equal
the Treasury Rate (as determined below) as adjusted (x) by the addition or
subtraction of the Spread, if any, specified on the face hereof and/or (y) by
the multiplication by the Spread Multiplier, if any, specified on the face
hereof. "Treasury Rate" means the rate for the most recent auction of direct
obligations of the United States ("Treasury bills") having the Index Maturity
specified on the face hereof, as such rate is published in H.15(519) under the
heading "U.S. Government Securities/Treasury Bills/Auction Average (Investment)"
or, if such rate is not so published by 3:00 P.M., New York City time, on the
Calculation Date, the auction average rate (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury by 3:00 P.M., New York City time, on such Calculation Date. If
the results of the auction of Treasury bills having the Index Maturity specified
on the face hereof are neither published in H.15(519) nor otherwise published or
reported as provided above by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then the Treasury Rate
will be calculated by the Calculation Agent and will be a yield to maturity
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates as of 3:30 P.M., New York City time, on such Treasury
Interest Determination Date (as defined below), of three leading primary United
States government securities dealers in The City of New York selected by the
Calculation Agent, for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified on the face hereof or, if there are two
such issues which are equidistant from the Index Maturity specified on the face
hereof, then the longer of the two; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate determined on such Treasury Interest
Determination Date will be the Treasury Rate determined on the immediately
preceding Treasury Interest Determination Date or, in the case of the first
Treasury Interest Determination Date, the Initial Interest Rate specified on the
face hereof.
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CD Rate. If the Interest Rate Basis of this Subordinated Note is the CD
Rate, the interest rate hereon for any Interest Reset Date shall equal the CD
Rate (as determined below), as adjusted (x) by the addition or subtraction of
the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"CD Rate" means the rate on the relevant CD Interest Determination Date (as
defined below) for negotiable certificates of deposit having the Index Maturity
specified on the face hereof, as published in H.15(519) under the heading "CDs
(Secondary Market)". If such rate is not so published before 3:00 P.M., New
York City time, on the Calculation Date pertaining to such CD Interest
Determination Date, then the CD Rate will be the rate on such CD Interest
Determination Date for negotiable certificates of deposit having the Index
Maturity specified on the face hereof as published in Composite Quotations under
the heading "Certificates of Deposit". If such rate is published neither in
H.15(519) nor in Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, the CD Rate will be calculated by the Calculation Agent and
will be the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Interest Determination Date, of three
leading non-bank dealers of negotiable U.S. dollar certificates of deposit in
The City of New York (which may include one or more of the Agents) selected by
the Calculation Agent for negotiable certificates of deposit of the four highest
rated banks (as rated by two nationally recognized rating agencies) of the 25
largest United States banks based on the most recent year-end survey published
in The American Banker (or a comparable publication) with a remaining maturity
closest to the Index Maturity specified on the face hereof in a denomination of
$5,000,000; provided, however, that, if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
determined on such CD Interest Determination Date will be the CD Rate determined
on the immediately preceding CD Interest Determination Date or, in the case of
the first CD Interest Determination Date, the Initial Interest Rate specified on
the face hereof.
Federal Funds Rate. If the Interest Rate Basis of this Subordinated Note
is the Federal Funds Rate, the interest rate hereon for any Interest Reset Date
shall equal the Federal Funds Rate (as determined below, as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face hereof
and/or (y) by the multiplication by the Spread Multiplier, if any, specified on
the face hereof. "Federal Funds Rate" means the rate on the relevant Federal
Funds Interest Determination Date (as defined below) for Federal Funds having
the Index Maturity specified on the face hereof, as published in H.15(519) under
the heading "Federal Funds (Effective)". If such rate is not published by 3:00
P.M., New York City time, on the
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Calculation Date pertaining to such Federal Funds Interest Determination Date,
then the Federal Funds Rate will be the rate on such Federal Funds Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If such rate is published neither in H.15(519)
nor in Composite Quotations by 3:00 P.M., New York City time, on such
Calculation Date, the Federal Funds Rate will be calculated by the Calculation
Agent and will be the arithmetic mean of the rates, as of 3:00 P.M., New York
City time, on such Federal Funds Interest Determination Date, for the last
transaction in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in The City of New York (which may include one or
more of the Agents) selected by the Calculation Agent; provided, however, that
if the brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate determined on such Federal
Funds Interest Determination Date will be the Federal Funds Rate determined on
the immediately preceding Federal Funds Interest Determination Date or, in the
case of the first Federal Funds Interest Determination Date, the Initial
Interest Rate specified on the face hereof.
Prime Rate. If the Interest Rate Basis of this Subordinated Note is the
Prime Rate, the interest rate hereon for any Interest Reset Date shall equal the
Prime Rate (as determined below), as adjusted (x) by the addition or subtraction
of the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"Prime Rate" means the rate set forth on the relevant Prime Interest
Determination Date (as defined below) in H.15(519) under the heading "Bank Prime
Loan". If such rate is not published prior to 9:00 A.M., New York City time, on
the Calculation Date pertaining to such Prime Interest Determination Date, then
the Prime Rate will be determined by the Calculation Agent and will be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for such Prime Interest Determination
Date. If fewer than four such rates but two or more such rates appear on the
Reuters Screen NYMF Page on such Prime Interest Determination Date, the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic mean
of the prime rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Interest
Determination Date by three major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of
-12-
the United States, or any State thereof, having total equity capital of at least
$500,000,000 and being subject to supervision or examination by Federal or State
authority, selected by the Calculation Agent to provide such rate or rates;
provided, however, that if the banks or trust companies selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the Prime
Rate determined on such Prime Interest Determination Date will be the Prime Rate
determined on the immediately preceding Prime Interest Determination Date or, in
the case of the first Prime Interest Determination Date, the Initial Interest
Rate specified on the face hereof. "Reuters Screen NYMF Page" means the display
designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks).
11th District Cost of Funds Rate Notes. If the Interest Rate Basis of this
Subordinated Note is the 11th District Cost of Funds Rate, the interest rate
hereon for any Interest Reset Date shall equal the 11th District Cost of Funds
Rate (as determined below), as adjusted (x) by the addition or subtraction of
the Spread, if any, specified on the face hereof and/or (y) by the
multiplication by the Spread Multiplier, if any, specified on the face hereof.
"11th District Cost of Funds Rate" means the rate equal to the monthly
weighted average cost of funds for the calendar month immediately preceding the
month in which the relevant 11th District Cost of Funds Interest Determination
Date (as defined below) falls, as set forth under the caption "11th District" on
Telerate Page 7058 (as defined below) as of 11:00 A.M., San Francisco time, on
such 11th District Cost of Funds Interest Determination Date. If such rate does
not appear on Telerate Page 7058 on any related 11th District Cost of Funds
Interest Determination Date, the 11th District Cost of Funds Rate for such 11th
District Cost of Funds Interest Determination Date shall be the monthly weighted
average cost of funds paid by member institutions of the 11th Federal Home Loan
Bank District that was most recently announced (the "11th District Cost of Funds
Index") by the Federal Home Loan Bank of San Francisco (the "FHLB of San
Francisco") as such cost of funds for the calendar month immediately preceding
the date of such announcement. If the FHLB of San Francisco fails to announce
such rate for the calendar month immediately preceding such 11th District Cost
of Funds Interest Determination Date, then the 11th District Cost of Funds Rate
determined as of such 11th District Cost of Funds Interest Determination Date
will be the 11th District Cost of Funds Rate determined on the immediately
preceding 11th District Cost of Funds Interest Determination Date or, in the
case of the first
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11th District Cost of Funds Interest Determination Date, the Initial Interest
Rate specified on the face hereof.
"Telerate Page 7058" means the display designated as page "7058" on the Dow
Jones Telerate Service (or such other page as may replace the 7058 page on that
service for the purpose of displaying the monthly weighted average cost of funds
paid by member institutions of the 11th Federal Home Loan Bank District).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, specified on the face hereof and
shall not be lower than the Minimum Interest Rate, if any, specified on the face
hereof. In addition, the interest rate hereon will in no event be higher than
the maximum rate permitted by Illinois law, as the same may be modified by
United States law of general application.
The Bank will at all times appoint and maintain a banking institution as
Calculation Agent hereunder. Unless otherwise specified on the face hereof, the
Bank has initially appointed itself as Calculation Agent. Upon the request of
the holder of this Subordinated Note, the Calculation Agent will provide the
interest rate then in effect, and, if different, the interest rate which will
become effective as a result of a determination made on the most recent Interest
Determination Date with respect to this Subordinated Note.
Unless otherwise specified on the face hereof, all percentages resulting
from any calculation on this Subordinated Note will be rounded, if necessary, to
the nearest one-hundred thousandth of a percentage point, with five one-
millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545)
being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 9.87654% (or .0987654)), and all dollar amounts used in or resulting
from such calculation on this Subordinated Note will be rounded to the nearest
cent (with one-half cent being rounded upwards). The interest rate in effect on
any Interest Reset Date will be the applicable rate as reset on such Interest
Reset Date. The interest rate applicable to any other day is the interest rate
from the immediately preceding Interest Reset Date (or, if none, the Initial
Interest Rate). The Calculation Agent's determination of any interest rate will
be final and binding in the absence of manifest error.
The Interest Determination Date pertaining to an Interest Reset Date if the
rate of interest hereon shall be determined in accordance with the provisions
under the headings above entitled "Commercial Paper Rate" (the "Commercial Paper
Interest Determination Date"), "CD Rate" (the "CD Interest Determination Date"),
"Federal Funds Rate" (the "Federal Funds Interest Determination Date") or "Prime
Rate" (the "Prime Interest
-14-
Determination Date") will be the second Business Day preceding such Interest
Reset Date. The Interest Determination Date pertaining to an Interest Reset Date
if the rate of interest hereon shall be determined in accordance with the
provisions under the heading above entitled "11th District Cost of Funds Rate"
(the "11th District Cost of Funds Interest Determination Date") will be the last
working day of the month immediately preceding such Interest Reset Date on which
the FHLB of San Francisco publishes the 11th District Cost of Funds Index. The
Interest Determination Date pertaining to an Interest Reset Date if the rate of
interest hereon shall be determined in accordance with the provisions under the
heading above entitled "LIBOR" (the "LIBOR Interest Determination Date") will be
the second London Business Day preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date if the rate of interest
hereon shall be determined in accordance with the provisions under the heading
above entitled "Treasury Rate" (the "Treasury Interest Determination Date") will
be that day of the week in which such Interest Reset Date falls on which
Treasury bills would normally be auctioned. Treasury bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on any
Interest Reset Date for a Subordinated Note with respect to which the Interest
Rate Basis specified on the face hereof is the Treasury Rate, then such Interest
Reset Date shall instead be the first Business Day immediately following such
auction date.
The Calculation Date pertaining to the Interest Determination Date for any
Subordinated Note shall be the tenth calendar day after such Interest
Determination Date or, if any such day is not a Business Day, the next
succeeding Business Day.
Payments of interest hereon with respect to any Interest Payment Date will
include interest accrued from, and including, the Original Issue Date or from,
and including, the last date on which interest has been paid to, but excluding,
such Interest Payment Date; provided, however, that, if the Interest Reset
Period with respect to this Subordinated Note is daily or weekly, the interest
payable on any Interest Payment Date, other than interest payable on any date on
which principal of this Subordinated Note is payable, will include interest
accrued from, and including, the Original Issue Date or from, but excluding, the
last date in respect of which interest has been paid or made available for
payment, as the case may be, to, and including, the Regular Record Date next
preceding such Interest Payment Date,
-15-
except that the interest payable at maturity or upon earlier redemption will
include interest accrued to, but excluding, the Maturity Date or the date of
earlier redemption, as the case may be.
Accrued interest on this Subordinated Note from the Original Issue Date or
from the last date to which interest has been paid or duly provided is
calculated by multiplying the face amount of this Subordinated Note by an
accrued interest factor. Such accrued interest factor is computed by adding the
interest factor calculated for each day from the Original Issue Date or from the
last date to which interest has been paid or duly provided for, as the case may
be, to the date for which accrued interest is being calculated in the period for
which interest is being calculated. The interest factor for each such day is
computed by dividing the interest rate applicable to such date by 360, in the
case that the Interest Rate Basis specified on the face hereof is the Commercial
Paper Rate, LIBOR, CD Rate, Federal Funds Rate, Prime Rate or 11th District Cost
of Funds Rate, or by the actual number of days in the year, in the case that the
Interest Rate Basis specified on the face hereof is the Treasury Rate.
If this Subordinated Note is an Original Issue Discount Note and if an
Event of Default with respect to this Subordinated Note shall have occurred and
be continuing, the Default Amount (as defined hereafter) of this Subordinated
Note may be declared due and payable in the manner and with the effect provided
herein. The "Default Amount" shall be equal to the adjusted issue price as of
the first day of the accrual period as determined under Proposed Treasury
Regulation Section 1.1272-1(e) (or successor regulation) under the United States
Internal Revenue Code of 1986, as amended, in which the date of acceleration
occurs increased by the daily portion of the original issue discount for each
day in such accrual period ending on the date of acceleration, as determined
under Proposed Treasury Regulation Section 1.1272-1(c) (or successor regulation)
under the United States Internal Revenue Code of 1986, as amended. Upon payment
of (i) the amount of principal or premium, if any, so declared due and payable
and (ii) interest on any overdue principal and overdue interest or premium, if
any (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Bank's obligations in respect of the payment of
the principal of, and interest or premium, if any, on, this Subordinated Note
shall terminate.
In case any Subordinated Note shall at any time become mutilated,
destroyed, lost or stolen and such Subordinated Note or evidence satisfactory to
the Bank of the loss, theft or destruction thereof (together with indemnity
satisfactory to the Bank and such other documents or proof as may be required in
the premises) shall be delivered to the Bank, a new Subordinated Note
-16-
of like tenor will be issued by the Bank in exchange for the Subordinated Note
so mutilated, or in lieu of the Subordinated Note so destroyed or lost or
stolen. All expenses and reasonable charges associated with procuring the
indemnity referred to above and with the preparation, authentication and
delivery of a new Subordinated Note shall be borne by the holder of the
Subordinated Note so mutilated, destroyed, lost or stolen. If any Subordinated
Note which has matured or is about to mature shall become mutilated, destroyed,
lost or stolen, the Bank may, instead of issuing a substitute Subordinated Note,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Subordinated Note) upon compliance by the holder thereof
with the provisions of this paragraph.
No recourse shall be had for the payment of the principal of, premium, if
any, or interest on, this Subordinated Note, for any claim based hereon, or
otherwise in respect hereof, against any shareholder, employee, officer or
director, as such, past, present or future, of the Bank or of any successor
corporation, either directly or through the Bank or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
An "Event of Default" with respect to this Subordinated Note will occur if
the Bank shall consent to, or a court or other governmental agency shall enter a
decree or order for, the appointment of a receiver or other similar official in
any liquidation, insolvency or similar proceeding with respect to the Bank or
all or substantially all of its property and, in the case of a decree or order,
such decree or order shall have remained in force for a period of 60 days. If
an Event of Default shall occur and be continuing, the holder of this
Subordinated Note may declare the principal amount of, and accrued interest and
premium, if any, on, this Subordinated Note due and payable immediately by
written notice to the Bank. Upon such declaration and notice, such principal
amount, accrued interest and premium, if any, shall become due and payable seven
calendar days after such notice. Any Event of Default with respect to this
Subordinated Note may be waived by the holder hereof. NO PAYMENT MAY BE MADE ON
THIS SUBORDINATED NOTE IN THE EVENT OF ACCELERATION RESULTING FROM AN EVENT OF
DEFAULT WITHOUT THE PRIOR WRITTEN CONSENT OF THE FEDERAL RESERVE BANK OF
CHICAGO. THERE IS NO RIGHT OF ACCELERATION IN THE CASE OF A DEFAULT IN THE
PAYMENT OF PRINCIPAL OF, OR INTEREST ON, THIS SUBORDINATED NOTE OR IN THE
PERFORMANCE OF ANY OTHER OBLIGATION OF THE BANK UNDER THIS SUBORDINATED NOTE OR
UNDER ANY OTHER SECURITY ISSUED BY THE BANK.
-17-
No provision of this Subordinated Note shall alter or impair the obligation
of the Bank, which is absolute and unconditional, to pay the principal, and
premium, if any, and interest on, this Subordinated Note in U.S. dollars at the
times, places and rate herein prescribed.
The Bank shall cause to be kept at the corporate trust office of the
Subordinated Note Registrar designated below a register (the register maintained
in such corporate trust office or any other office or agency of the Bank in the
Place of Payment herein referred to as the "Subordinated Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Bank
shall provide for the registration of the Subordinated Notes and of transfers of
the Subordinated Notes. The Bank is hereby initially appointed "Subordinated
Note Registrar" for the purposes of registering the Subordinated Notes and
transfers of the Subordinated Notes as herein provided.
The transfer of this Subordinated Note is registrable in the Subordinated
Note Register, upon surrender of this Subordinated Note for registration of
transfer at the office or agency of the Bank in the Place of Payment, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Bank and the Paying Agent duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Subordinated Notes of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. Notwithstanding the foregoing, the Bank shall not be required to
register the transfer of any Subordinated Note that has been called for
redemption during a period beginning at the opening of business fifteen calendar
days before the day of mailing of a notice of such redemption and ending at the
close of business on the day of such mailing.
No service charge shall be made for any such registration of transfer or
exchange, but the Bank may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The Subordinated Notes are issuable only in registered form without coupons
in minimum denominations of $250,000 and any integral multiple of $1,000 in
excess thereof. Each owner of a beneficial interest in this Subordinated Note
is required to hold a beneficial interest in $250,000 principal amount or any
integral multiple of $1,000 in excess thereof of this Subordinated Note at all
times.
Prior to due presentment of this Subordinated Note for registration of
transfer, the Bank, the Paying Agent or any agent of the Bank or the Paying
Agent may treat the person in whose
-18-
name this Subordinated Note is registered as the owner hereof for all purposes,
whether or not this Subordinated Note be overdue, and neither the Bank, the
Paying Agent nor any such agent shall be affected by notice to the contrary.
All notices to the Bank under this Subordinated Note shall be in writing
and addressed to the Bank at 50 South LaSalle Street, Chicago, Illinois 60675,
or to such other address of the Bank as the Bank may notify the holders of the
Subordinated Notes.
This Subordinated Note shall be governed by, and construed in accordance
with, the laws of the State of Illinois.
As used in this Subordinated Note, the term "Agents" shall mean Goldman,
Sachs & Co., CS First Boston Corporation, J.P. Morgan Securities Inc., Lehman
Brothers, Lehman Brothers Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce
Fenner & Smith Incorporated, and any other person, firm or entity which shall
hereafter be designated as an "Agent" under that certain Amended and Restated
Distribution Agreement, dated September 6, 1995, among the Bank, Northern Trust
Corporation and the Agents (as hereinabove defined).
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
THE NORTHERN TRUST COMPANY
By:_______________________________
Authorized Signatory
-19-
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the within Subordinated Note, shall be construed as though they were written
out in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - __________ Custodian ___________
(Cust) (Minor)
under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used
though not in the above list.
-20-
ASSIGNMENT
FOR VALVE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________
_______________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address,
including postal zip code, of assignee)
________________________________________________________________________________
the within Subordinated Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
to transfer said Subordinated Note on the books of the Bank, with full power of
substitution in the premises.
Dated:____________________________
________________________________________
NOTICE: The signature to this assigment
must correspond with the name as written
upon the face of the within Subordinated
Note in every particular, without
alteration or enlargement or any change
whatsoever.
-21-